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A lawyer who served for many years as chair of the corporate department at Philadelphia-based Fox, Rothschild, O’Brien & Frankel pleaded guilty in U.S. District Court July 27 to a charge of making a false statement to the Securities and Exchange Commission in connection with an insider trading investigation. Ramon R. Obod, 66, is unlikely to face any prison term because his crime carries an offense level of just six under the federal sentencing guidelines, and his confession yesterday earns him a two-point reduction. And since prosecutors have agreed that no upward enhancements apply, Obod’s guilty plea to a Class D felony will place him in “Zone A,” a section of the guidelines sentencing table that calls for probationary terms that may, but need not, include conditions such as home detention or community confinement. Obod voluntarily left his partnership at Fox Rothschild several weeks ago, according to the firm’s managing partner, Louis W. Fryman. Fryman stressed that Obod’s criminal troubles had nothing to do with his work at the firm or any other lawyers there. “This was an individual and personal matter of Mr. Obod’s that was unrelated to any firm matter at all,” Fryman said. Assistant U.S. Attorney Robert Goldman said Obod was on the board of directors of American Travelers and also served as outside counsel to the insurer, representing them between 1986 and 1996. In August 1996, Obod was involved in negotiations that led to the acquisition of American Travelers by Indiana-based Conseco Inc. Soon after the announcement of the merger, Goldman said, a representative of Transport Holdings Inc. was seeking an introduction to Conseco for possible merger discussions. The representative asked Travelers’ president, John Powell, to introduce him to Conseco, but asked Powell to keep the information confidential. Later that day, Powell received a call from an investment banker at Donaldson Lufken & Jenrette who asked whether he believed that Conseco and Transport Holdings would make for a good merger. Powell cut the call off short and telephoned Obod to get advice on what to do next. Goldman said Powell later introduced Transport to Conseco and merger discussions began. Within a month, a deal had been struck, he said, and news of the merger was related from Conseco to Powell, and from Powell to Obod. Two days later, on Sept. 23, 1996, Goldman said, Obod purchased 500 shares of Transport Holdings and sold them three days after that — on the day the merger was publicly announced — to earn a handsome, after-tax profit of $5,700. In late October 1996, Goldman said, Obod was interviewed by the SEC and was asked directly why he had purchased the Transport securities. The SEC lawyer would have testified that Obod replied that he “had a feeling that Conseco might buy them,” Goldman said. Obod went on to tell the SEC investigator that he may have had discussions with people at Donaldson Lufken & Jenrette or at Travelers about whether Transport would be a good acquisition candidate for Conseco, Goldman said. “He stated that if he had these discussions, it was merely speculating — ‘throwing names around’ or ‘shooting the breeze’ — rather than discussing actual negotiations between the companies,” Goldman said. Obod went on to tell the investigator that he might have spoken to someone, whose name he could not recall, who was going to recommend a deal between Transport and Conseco to the president of Conseco, Goldman said. But Obod ended the conversation by stating that he was “astonished” when he learned of the acquisition from his broker, Goldman said. In a guilty plea hearing yesterday before U.S. District Judge J. Curtis Joyner, Obod admitted that his Oct. 21, 1996, conversation with the SEC constituted a false statement because he failed to disclose the fact that he had been informed of the imminent acquisition by a representative of Travelers who had personal knowledge of the ongoing negotiations.

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